Bad Design Is Expensive

It's easy to wish your web site had a 'better design'. Or that it was 'more user friendly'. But many marketers have trouble getting past their dissatisfaction and moving into redesign, primarily because they find it hard to cost-justify the effort.

Jared Spool, one of the true usability kings, has an excellent article on this topic over at webpronews. Among other things, he shows one clear example of how to calculate the economic loss from bad design:

As an example, let's look at Amtrak.com, the official web site for America 's passenger railroad system. The folks at Amtrak have designed their site to allow customers to make reservations online.

Imagine we've observed during usability testing that Amtrak.com makes it very difficult to complete a registration. Only one out of every four attempts to book a registration online actually succeeds.

A quick analysis of the site's logs shows that the average reservation is for $220. It also shows that there are currently 10,000 reservations successfully completed every month, producing a monthly revenue stream of $2,200,000.

Our inspection of the site's logs shows the same patterns we see in the labs: only 25% of the people who start reservations actually complete them. That means that 30,000 reservations a month aren't completed. Using our average reservation, that roughly puts the monthly failed registrations at $6,600,000 or $79,200,000 a year.

That's a lot of money for Amtrak to recapture. However, our studies show that many of those folks won't actually register, even if the site was much more usable. The current design forces a potential traveler to start the registration process just to see what a fare costs or when trains run between two cities. Many of these travelers will go for cheaper or more convenient travel and will never register.

Therefore, we should estimate our frustration cost carefully, removing these "no-go" users from our estimates. However, we may find it difficult to predict the percentage of visitors accurately without knowing their purchase intentions. In this case, we'll conservatively estimate that only 20% of people who are not currently registering today would do so with an easier-to-use interface. (By estimating conservatively, we make it easier for others to put faith in our calculations while also allowing for the happy surprise of exceeding our goals.)

20% of our 30,000 uncompleted registrations a month is 6,000 people who we think will register with an improved interface. That means that a well-designed reservation system could increase revenues by $1,320,000 a month or $15,840,000 a year.

That means that the Cost of Frustration for Amtrak.com is almost $16 million annually. That ought to get someone's attention.

Posted by Craig Danuloff at September 23, 2004 11:12 PM